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InVivo Therapeutics Reports 2012 Financial Results,Provides Business Update
CAMBRIDGE, Mass.--(BUSINESS WIRE)--InVivo Therapeutics Holdings Corp. (OTC/BB: NVIV), adeveloper of groundbreaking technologies for the treatment of spinal cord injuries (SCI) and otherneurotrauma conditions, today reported financial results for the year ended December 31, 2012 andprovided a business update.
InVivo has pioneered a new treatment platform utilizing a variety of biocompatible polymer-baseddevices to provide structural support to a damaged spinal cord in order to spare tissue from scarringwhile improving functional recovery and prognosis after a traumatic SCI. Today there is no effectivetreatment for the spinal cord for paralysis caused by SCIs, and the market potential is estimated tobe over $10 billion.
"The year 2012 has quickly become our most productive. We grew our research and developmentteams to support a pipeline that now exceeds seven new treatment options for neurotrauma, andwe've established a GMP manufacturing facility capable of manufacturing our scaffold and hydrogelsfor human use," said Frank Reynolds, InVivo Chief Executive Officer. "We're ready to start a first-i--man clinical trial of our biopolymer scaffolding in acute SCI patients, and we expect as many as fiveproducts to be either on the market or in clinical studies by the end of 2014. We have built anoutstanding regulatory team to support our RD capabilities in neurotrauma, and are poised tocontinue developing new applications for our hydrogels in other areas of the body."
Recent Corporate Highlights
Biopolymer Scaffolding for SCI:
InVivo submitted an updated Investigational Device Exemption to the FDA in February 2013,requesting permission to begin a human study to test its biopolymer scaffolding to treat acute SCI.The study will be an open label study and will evaluate the safety and efficacy of the biopolymerscaffolding in five SCI patients with thoracic injuries. The Company is also working with the FDA inorder to have the scaffolding device designated as a Humanitarian Use Device, a designation thatInVivo expects will create a faster path to market.
InVivo is the first company to successfully demonstrate functional improvement in non-humanprimates paralyzed after a SCI model. Recent data compiled from InVivo's 2011 non-human primatestudy confirm that the functional recovery observed in the treatment group was attributable to thebiopolymer scaffolding alone, and was not due to spontaneous recovery. InVivo plans to submit thisexciting data to a prestigious scientific journal for publication in 2013.
The Company has engaged with the FDA for InVivo's second product, a novel injectable hydrogelspecifically engineered for nervous system tissue to deliver effective local release of drugs for thetreatment of peripheral nerve pain, an expected $24 billion market opportunity. The Companyintends to meet with representatives from the FDA's Office of Combination Products in the comingmonths to map out a clinical development plan. InVivo also recently completed a pre-clinical nervepain study with the Geisinger Health System and anticipates that this promising data will besubmitted for publication during 2013.
InVivo has commenced the development of novel injectable hydrogels to be used to treat fibrosis andas dural sealants, dural replacements, and nerve conduits. The FDA regulates biomaterials used asdural replacements and nerve conduits as 510(k) products, and the Company expects to file 510(k)applications for these two indications in 2014.
Kenneth DiPietro, Executive Vice President Human Resources at Biogen Idec, joined the Company'sBoard of Directors in December 2012. Mr. DiPietro brings 30 years of senior human resourcesexperience gained at several Global 500 companies including Biogen, Microsoft and PepsiCo, Inc.Mr. DiPietro will help manage growth at InVivo.
The Company has filed manufacturing patent applications covering non-toxic manufacturingprocesses for biomaterials implanted in the nervous system. InVivo's broad patent portfolio coversthe use of any biomaterial alone or in combination with any drug, growth factor or stem cell for SCI.InVivo's patent portfolio has also been expanded to include parts of the peripheral nervous system,the cranial nerve, the brain and retina, and the cavernous nerve.
Financial Results
For the year ended December 31, 2012, the Company reported net income of $4,664,000, or $.06per diluted share, compared with a net loss of $34,728,000, or $.67 per diluted share, for the yearended December 31, 2011. Included in net income (loss) for the years ended December 31, 2012 and2011 were a non-cash derivative gain of $17,480,000 in 2012, and a non-cash derivative loss of$26,066,000 in 2011, both of which reflect changes in the fair value of the derivative warrantliability. Excluding the non-cash derivative gain (loss), the non-GAAP diluted loss per share for theyear ended December 31, 2012 would have been $.20 per dilutive share, compared to $.17 perdiluted share for the year ended December 31, 2011. Total operating expenses for the year endedDecember 31, 2012 were $12,779,000 compared with $8,659,000 for the year ended December 31,2011. The Company ended the year with $13,426,000 of cash on hand.
About InVivo Therapeutics
InVivo Therapeutics Holdings Corp. is focused on utilizing polymers as a platform technology todevelop treatments to improve function in individuals paralyzed as a result of traumatic spinal cordinjury. The Company was founded in 2005 on the basis of proprietary technology co-invented byRobert Langer, ScD, Professor at Massachusetts Institute of Technology, and Joseph P. Vacanti,M.D., who is affiliated with Massachusetts General Hospital. In 2011, the Company earned theprestigious David S. Apple Award from the American Spinal Injury Association for its outstandingcontribution to spinal cord injury medicine. The publicly traded company is headquartered inCambridge, MA. For more details, visit www.invivotherapeutics.com
Safe Harbor Statement
Any statements contained in this press release that do not describe historical facts may constituteforward-looking statements within the meaning of the federal securities laws. Any forward-lookingstatements contained herein are based on current expectations, but are subject to a number of risksand uncertainties. The factors that could cause actual future results to differ materially from currentexpectations include, but are not limited to, risks and uncertainties relating to the Company's abilityto sell additional shares of common stock and warrants to purchase common stock, the Company'sability to develop, market and sell products based on its technology; the expected benefits andefficacy of the Company's products and technology in connection with spinal cord injuries; theavailability of substantial additional funding for the Company to continue its operations and to
conduct research and development, clinical studies and future product commercialization; and theCompany's business, research, product development, regulatory approval, marketing anddistribution plans and strategies. These and other factors are identified and described in more detailin our filings with the SEC, including our Form 10-K and 10-Q's and our current reports on Form 8-K. We do not undertake to update these forward-looking statements made by us.
(Tables to follow)
InVivo Therapeutics Holdings Corp.
(A Developmental Stage Company)
Consolidated Balance Sheets
December 31,
2012
2011
ASSETS:
Current assets:
Cash and cash equivalents
$
12,825,090
$
4,363,712
Restricted cash
601,351
547,883
Prepaid expenses
174,643
104,022
Total current assets
13,601,084
5,015,617
Property and equipment, net
2,311,942
520,482
Other assets
148,639
166,139
Total assets
$
16,061,665
$
5,702,238
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current liabilities:
Accounts payable
$
1,152,550
$
567,195
Loan payable-current portion
-
50,578
Capital lease payable-current portion
32,606
30,724
Derivative warrant liability
14,584,818
35,473,230
Accrued expenses
1,021,275
618,369
Total current liabilities
16,791,249
36,740,096
Loan payable-less current portion
1,578,000
83,794
Capital lease payable-less current portion
2,799
38,042
Total liabilities
18,372,048
36,861,932
Commitments and contingencies
Stockholders' deficit:
Common stock, $0.00001 par value, authorized 200,000,000 and
100,000,000 shares at December 31, 2011 and December 31, 2010,
respectively; issued and outstanding 65,881,122 and 53,760,471 shares
at December 31 2012 and 2011, respectively.
659
538
Additional paid-in capital
40,842,339
16,656,830
Deficit accumulated during the development stage
(43,153,381
)
(47,817,062
)
Total stockholders' deficit
(2,310,383
)
(31,159,694
)
Total liabilities and stockholders' deficit
$
16,061,665
$
5,702,238
InVivo Therapeutics Holdings Corp.
(A Developmental Stage Company)
Consolidated Statements of Operations
Period from
November 28,
2005
Years Ended
(inception) to
December 31,
December 31
2012
2011
2012
Operating expenses:
Research and development
$
6,375,795
$
4,102,847
$
15,259,629
General and administrative
6,403,656
4,555,872
14,655,193
Total operating expenses
12,779,451
8,658,719
29,914,822
Operating loss
(12,779,451
)
(8,658,719
)
(29,914,822
)
Other income (expense):
Other income
-
-
383,000
Interest income
35,184
8,759
55,233
Interest expense
(71,726
)
(12,676
)
(1,138,057
)
Derivatives gain (loss)
17,479,674
(26,065,579
)
(12,538,487
)
Other income (expense), net
17,443,132
(26,069,496
)
(13,238,311
)
Net income (loss)
$
4,663,681
$
(34,728,215
)
$
(43,153,133
)
Net income (loss) per share, basic
$
0.07
$
(0.67
)
$
(1.22
)
Net income (loss) per share, diluted
$
0.06
$
(0.67
)
$
(1.22
)
Weighted average number of common shares outstanding, basic
63,226,899
51,894,871
35,348,456
Weighted average number of common shares outstanding, diluted
71,919,419
51,894,871
35,348,456
InVivo Therapeutics Holdings Corp.
(A Developmental Stage Company)
Pro Forma Results
Years Ended
December 31,
2012
2011
Pro Forma Net Loss
$
(12,815,993
)
$
(8,662,636
)
Derivative Gain (Loss)
17,479,674
(26,065,579
)
Reported GAAP Net Income (Loss)
$
4,663,681
$
(34,728,215
)
Pro Forma Net Loss Per Diluted Share
$
(0.18
)
$
(0.17